GlobalData Plc

RBC experiments with blockchain-based loyalty

Royal Bank of Canada (RBC) is working on a blockchain-based loyalty program to test the use of blockchain protocols with regard to an alternative form of currency, enabling consumers to earn, redeem, and share their reward points like cash.

Customer loyalty is critical for business, and with the plethora of loyalty programs available in everyday life, one thing consumers are now craving is simplicity. Rewards programs offered by banks and other providers can be confusing and complex: how points are earned, where they are stored, how you turn them into rewards, and how you redeem them. These factors pooled together, it is clear that utility is getting in the way of the rewards themselves and consumers are now looking for programs that allow them to check and use their reward points at any given time, without too much hassle.

RBC has taken a significant step towards responding to these pain points by offering customers a realtime loyalty program through experimenting with the blockchain. The bank is currently working on how it can use a blockchain to reward customers in realtime, either when making a purchase or when redeeming a reward so that, according to Eddy Ortiz, vice president of Solution Acceleration and Innovation, “reward points become like liquid cash.”

RBC is already exploring the application of blockchain in cross-border remittance transactions; a blockchain-based loyalty program will reduce infrastructure costs for the bank and make the process far more instantaneous, which is something consumers will value tremendously. Further, by implementing a blockchain-based loyalty points program, RBC is validating the reliability, security, and performance of this technology in favor of a large-scale deployment.

Integrating blockchain into banking through loyalty programs is a low-risk way to test the blockchain’s capabilities, and this approach is perhaps the most sensible next step for others looking to adapt the blockchain.

By Resham Karira, Retail Banking Analyst

To get in touch please contact Have something to say on this topic? Join our LinkedIn group: Retail Banking Insights.